Tax is not on revenue but on Profit!!

In India, a typical entrepreneur always wants to hide things from the tax department under a feeling of being questioned and asked for paying taxes. In this race for non-disclosure, sometimes the things of our benefit also remain underground.

This process of hiding starts without even knowing "What if this is disclosed?". Many a times this has positive impact as well!! Seems funny?? In our experience, many are seen doing the same.

Tax is not on revenue (sales) but on Profit!!  Funny part is people start worrying about taxes with respect to the revenue.

1. There are expenses which are deductible from this revenue to arrive at the profit. Please understand all the expenses which are incurred to earn the revenue directly and indirectly are allowed to arrive at the taxable profit.
2. Not only cash expenses but the expenses which are to be paid on later date are also available. These are termed as accrued expenses in accounting language. This include your year end bills of supplies, rentals, electricity which don't get paid in that period but are pertaining to that period. 
3. Also, there is are certain virtual deduction like for depreciation of Capital Goods like plant, building, machinery, equipment, motor car purchased in past for the purpose of the business. This is basically value for wear and tear of the assets in that period to generate the sales. Additional deduction on account of depreciation is allowed in the year of such investments for plant and machinery.
4. Other virtual deduction that needs to be taken into account while doing the computation of profits is with regard to the Bad Debts. Many times of our customers don't pay after committing even after followup and legal action. Those customer balances could be written off in the books and claimed as deduction. Even the discounts while settlement of dues are available as deduction if part of the deal.
5. Whenever there is an actual help coming in from the Partners, Directors, family members or relatives, we can pay them salaries and commissions. Even the directors and partners can have legitimate remunerations which are available as deductions subject to certain conditions. 
6. You may claim market rentals for the family properties from the company. This is something that many of us may be missing.
7. Other areas to check are credit card expenses and cash spending for business directly and indirectly. This many a times doesn't gets reflected in the books and may be missed out. It may be for business development, marketing, conveyance and so on for business purpose.

Above is a very broad list of items which are available as business deductions and we can deduce the sales / revenue to this extent before working out the taxes.

Our article on 5 basic disciplines of accounting for businesses would help you with tips of tracking the same diligently.

So, first track and than calculate correct PROFITS. It's quiet possible that you end up at a legitimate and acceptable tax liability without playing any gimmicks :-)

Free Due-date Reminders - a Christmas Gift from MyMuneemji

Christmas is the festival of Cakes, Candles and Carrels. Cake says "be sweet", Carrels say "Love one and all" and Candles say "Light up your mind with knowledge". 

We at MyMuneemji extend warm greetings for Christmas and a Happy New Year 2014.

At this juncture, it is exciting to share that more functional version of MyMuneemji is launched. This welcomes the New Year with added visibility and pro-activeness.

As Just try our Free Signup to start getting free sms and email alerts on before relevant tax filing due-dates and avoid any interest or penalties. Do let us know if there are any suggestions and feedback in this regard to make us better in helping you.

Roha hardware is compliant now!!

Taheri bhai is a trader at small town of Roha. He runs a hardware shop having strong focus on paints. He has a got prestigious agency with Asian Paints.

With his honesty and hardwork, he could establish a great clientele with the MIDC around Roha. These relations are giving him good growth in business. 

To get organised and earn credibility with the Banks & Market, he wanted to get his accounts computerised. He also wanted to file his VAT returns and IT returns in time. 

MyMuneemji has helped Taheri bhai to computerise his books of account and be compliant with all the applicable tax laws since last two years. Over and above this, Taheri bhai now does his routine settlements with the clients and vendors based on the computerised ledgers which Mymuneemji providers on request. This has made Taheri bhai one of the smart and confident businessmen in this area. All this with zero travelling time and lower cost.

Taheri bhai says "MyMuneemji has simplified and brought on track my accounting work. I can now rest assure about my tax returns with this relation and focus on my business"

myMuneemji - an Accounting revolution !!!!

|| श्री || 

In the mid sixties, White and Green revolution took place in India making us self sufficient in the field of dairy and agriculture.  Likewise there is a need to do an accounting revolution to make accounting simple and hassle free for common man and entrepreneurs. While there had been substantial progress in the field of Information Technology from the manual age, the key problem today is the lack of an ecosystem, which provides accounting as a solution and not just as a product or service!!!  Accounting and taxation still remain mystery topics and the knowledge is in the handful of few. With increasing compliance, it is important that entrepreneurs and individuals get a proper book keeping and tax solution, so that they can focus on the business and not worry on the compliance matters at any point during the year. myMuneemji proposes to be the One Stop Shop Solution combining the latest technology  and processes , backed up by best in class accounting professionals.

In our country, many people are non-compliant not because they don’t want to pay tax, but because they feel the pinch of time and effort to handle these compliances. Today, there are variety of taxes both at a state and central level, which are applicable with different periodicity, rates and procedures. Complication in compliance is topped up by lack of skilled resources such as accountants and consultants to handle these procedures in systematic and timely manner.

On the other hand, India is yet a rural economy with majority of population concentrated in the tier two and three cities as well as villages which is scarcely literate. This population is ignorant of the compliances and disconnected from the happenings in these laws.

The only way to build in governance in this country is the Internet bases tools which can reach farthest of the places at a time with same amount of accuracy 24 X 7.

We are myMuneemji, are working towards taking accounting including all kinds of tax filings online with simplicity and service. The mission to make “Accounting for everyone and everywhere”.

Features like Document Management, Sms / email alerts,help desk and dashboards help make this a unique combination of product with service which creates transparency with complete accountability on both the sides.

Along accounting data entry options, myMuneemji endeavours that the best of the tax and legal advisors could be part of our panel who feel like joining this mission and helping their fellow countrymen, with the best in class advice. All this will be reaching the farthest and remotest places through the internet connection and sms.

Life with myMuneemji will be joyous as everything will be accounted for by everyone with effortless ease. People will not only file their taxes in time but even the smallest of the businessmen will also get their MIS (Management Information System). Along with compliance, this is also targeted to add value to the businesses as well as personal finance in some way. Having said this, myMuneemji is a product backed by a service engine, to handhold the customers and encourage them to adhere to the compliance.